China-US trade: China vows speedy action on trade commitments

Xi Jingping

The threat of further escalation in the trade war between the world's two largest economies has loomed large over financial markets and the global economy for much of the year, and investors initially greeted the ceasefire with relief.

"We are confident in implementation", the Chinese commerce ministry said, describing negotiations as "successful".

Referring to himself as a "Tariff Man", Trump issued a series of tweets that only further deepened the murkiness surrounding the trade truce that the two leaders said they had reached Saturday evening on the sidelines of the Group of 20 meeting.

"Very strong signals being sent by China once they returned home from their long trip, including stops, from Argentina", he wrote.

During the talks in Buenos Aires, Trump agreed to delay a scheduled escalation in United States tariffs on many Chinese goods, from 10 percent to 25 percent, that had been set to take effect January 1. "But if not remember, I am a Tariff Man".

Trump sowed more confusion as he opened the door to lengthier negotiations with China, suggesting that they could extend beyond a 90-day deadline to reach a deal to avoid a massive tariff increase.

Failure would raise the specter of a major escalation in the trade battle, with fresh USA tariff action and Chinese retaliation possibly as early as March.

White House economic adviser Larry Kudlow said earlier this week the US won Chinese commitments to buy more than $1 trillion in American products.

White House economic adviser Larry Kudlow said on Tuesday that a reduction in Chinese tariffs on USA cars and agricultural and energy commodities would be a "litmus test" for whether U.S.

Hopes were buoyed when Trump told reporters in Argentina that he had reached an "incredible" deal with Xi, the president following that up with a tweet saying, "China has agreed to reduce and remove tariffs on cars coming into China from the U.S. now the tariff is 40%".

"Reaching an agreement within three months is a spur to not only China, but also the U.S. If the two sides fail to reach a deal, all the White House promises will be invalid", it said. "When people or countries come in to raid the great wealth of our Nation, I want them to pay for the privilege of doing so", he added.

Mr Pompeo said in Brussels on Tuesday that the United States could abandon some global agreements to thwart bad actors like China, which he accused of cynically exploiting World Trade Organisation rules. Seven of the top 10 vehicle models manufactured in the USA and exported to China previous year were made by BMW and Mercedes-Benz. This fundamental misunderstanding of economics, combined with his reckless announcement of the detente that wasn't, scared investors and continues to undermine his administration's efforts at reaching a real trade deal with China. The company said it wants to ramp up production in North America and is considering - although hasn't yet decided - whether to set up a second plant in the U.S.to make power trains.

Trump has exaggerated the effect of the tariffs on USA revenue.

China has said comparatively little about the Trump-Xi agreement after senior Chinese officials briefed the media following the leaders' meeting, and there have been some differences between the two sides' accounts of what the deal entails.

While he said he would "happily sign" a fair deal that addresses United States concerns, he warned: "remember, I am a Tariff Man". General Motors, which not only exports some models to China but also imports the Chinese-made Envision SUV, fell 5 percent to $36.52 a share.

"Let the negotiations begin", Trump wrote on Tuesday.

In return, China agreed to buy what the White House called a "not yet agreed upon, but very substantial" amount of USA products to help narrow America's gaping trade deficit with China.

"We are no longer in the same buoyant economic or markets environment that we enjoyed earlier this year when threats of tariffs against China were first made", she said.

Chinese officials have been told to take necessary steps for the soybeans and liquefied natural gas purchases, according to two officials with knowledge of the discussions.

Related:

Comments


Other news